Whether the sole purpose condition in BIM45525 is met is a question of fact, to be determined by evidence of what the directors of the company concerned, or the proprietors of an unincorporated business, were seeking to achieve by taking out the insurance policy and paying the premiums. General guidance on the ‘wholly and exclusively’ test is at BIM37000 onwards.

Circumstances in which there may be non-trade purposes for taking out a ‘key person’ policy are:

where the policy is in respect of directors who are major shareholders but not other employees

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